Posted by calvintaneng > 2015-08-14 20:16 | Report Abuse

Great write up!

Posted by soojinhou > 2015-08-14 20:19 | Report Abuse

Good one kc. Mr market is mad indeed, even counters that benefit from ringgit depreciation got sold off.

Posted by zerocool7199 > 2015-08-14 20:26 | Report Abuse

Some investor start panic.bet that klci will meet some heavy selling from next week and this time turn from local investor.
Be prepare another selling pressure

Posted by coolio > 2015-08-14 20:32 | Report Abuse

Well written article KC, history shows that market will eventually recover after collapse. So for long term investor why have to worry if your cash is not needed for long term as KC said. Cheers guys

Posted by bagan > 2015-08-14 20:39 | Report Abuse

whatever it is, it has nothing to do with the government, whether they are corrupted or not. this crash has been anticipated as it is a part of our global financial market system. what i am mad about is the prolonged period of negative certainty created by Yellen, by hinting that rate hike will surely begins in Dec15. This created prolonged period of negativity from Aug to Dec that triggers fund managers to judged who sell first will lose less, as the closer you sell to the deadline, the cheaper the price will be and the cheaper the ringgit will be. A confounded blow will just make matters worse.
Due to these scenarios, you can see all markets are suffering bloodbath even as early as Jul15.Regardless whether the governments are corrupted or not, their markets are suffering the same terrible fate.However, as investor, we should be happy to see market consolidate as this kind of opportunity, even for me this is only my third time served with such an opportunity, first was 97, then 2008 and now 2015.
The first one 97, I was totally had no idea of how to capitalize on this kind of scenario, but luckily i bought my first house at a damn cheap price! The second one, I was not prepared at all, but this time 2015, guess what I've just sold my HOUSE!!!My bullets will be ready in October and once the dust settled, I'll be diving in, in a big way!!!
This kind of opportunity only come like once every 8 years, and I'm definitely not going to miss it!!!

Posted by Vin Cullen > 2015-08-14 20:58 | Report Abuse

Be Greedy When others are fearful !!!
But Why I still not yet fearful....
Maybe another BIG WAVE will bring KLCI lower !!

Posted by Probability > 2015-08-14 21:28 | Report Abuse

Thank you so much KC....priceless advise.

Posted by Probability > 2015-08-14 21:33 | Report Abuse

Bagan...selling house to dive??
Oooo...that's dangerous mate.

Posted by citychew_1886 > 2015-08-14 21:35 | Report Abuse

Good written kc,cash is king at this critical moment ,i wish i have plenty of extra cash now so that can get some good stock at a very high margin of safety.

Posted by bagan > 2015-08-14 21:40 | Report Abuse

Probability, no didnt sold the house to dive in, coincidentally i am relocating, so managed to cash out before the market crash. I am buying another house at another great offer and the cash will be sleeping in TH.

I'll buy only when KLSE is below 1000;)

Posted by choop818 > 2015-08-14 22:01 | Report Abuse

Good write-up. Speaking of WB and Munger, I don't think they want to see Hathaway being caught with another 50% drop as they may not be around this time to see its recovery. That goes for all very senior investors in Bursa Malaysia too. What is your advice in these circumstances?

Posted by Probability > 2015-08-14 23:06 | Report Abuse

at that age..and with that wealth its more of a game / hobby
than earnings for retirement.

if there are 'poor people' at that age...
entering the stock market..i don't think its advisable.

by the way life expectancy is increasing.
and you may also want to save for your generations..

Posted by Equityengineer > 2015-08-14 23:37 | Report Abuse

Priceless writing and philosophical. Just hold to good stocks and dividend base company. Commodity price rout, Greece, China economy slowdown interest rate hike is the main cause Cash is definitely king as it give opportunity to buy undervalued shares. No one can actually say will it be 1500 or rebound to 1700. Whatever will go wrong will go wrong.

Posted by choop818 > 2015-08-15 00:21 | Report Abuse

I for one, if I `know' that the market will fall by 50%, will be very worried indeed, irrespective of my age. If I cannot financially afford a hit, my pain may be more than that of WB's. One way to avoid the 50% haircut is to sell all and wait at the sidelines. Another, is to reinvest in some other vehicle that generates positive income. As they say, time is money. Worst come to the worst, to keep my money intact until the storm blows over. Any ideas?

Posted by cempedaklife > 2015-08-15 08:35 | Report Abuse

Nice write up. Thanks.

Posted by lcube > 2015-08-15 21:07 | Report Abuse

Many of us heard all these over & over again but yet when fears kicks in,most cannot remember & tend to react in an irrational manner.This article comes as a strong reassurance to inexperienced newbies like me & I hope the day the storm is over is not far ahead.Thanks!

Posted by goldenluck16 > 2015-08-15 22:04 | Report Abuse

When the bears stampede, irrationality overcomes logical thinking. Panic selling sets in, price goes down and the cycle repeats. Nevertheless the brave ones still manage to hold on to their shares (those with strong financial backing) but those with margin financing will see their shares value wiped out and forced selling come into play again. The duration of the bear market may prolong and the overall scenario turns negative. Short term outlook is not good with all the negative economic indicators. The currency wars among the major economic powers also affects the stock markets.

Posted by goldenluck16 > 2015-08-15 22:05 | Report Abuse

Cash is king now.

Posted by iswara > 2015-08-15 22:22 | Report Abuse

True, cash is KING.
If don't know how to use it, it is a loser too.

Posted by goreng_goreng > 2015-08-15 22:23 | Report Abuse

ty for sharing kc

Posted by Hercules > 2015-08-15 23:09 | Report Abuse

Hmm..... Seems majority of everyone had loss in faith. Be cheering! It's Saturday nite! Be remembered that every bad & good happened there are opportunity to earn money. Think out of your ways. Good day & be blessed!!

Posted by inwest88 > 2015-08-16 10:35 | Report Abuse

kc, great article. Those using your investment strategies are hardly hit by the current fall in prices.

Posted by oregami > 2015-08-16 10:39 | Report Abuse

Why does share investment has to be so harsh & stressful? Could it be more relaxing & fun? Any more relaxing approach besides taking the storm head to head?

Posted by m00077 > 2015-08-16 11:07 | Report Abuse

Remember what KC write in "When Bear Stampedes Again", : "It’s better to be too early than too late. It has been proven again and again, if you buy stocks at a big margin of safety, there is little risk and eventually market will revert to its mean. But make damn sure that you buy good companies at big discounts." Is it too early now or wait for a little while? I think is better too wait a little while until market is more stable. Don't wait too long because you will be too late.

Posted by calvintaneng > 2015-08-16 11:10 | Report Abuse

Correct!

During market crashes Good shares are also thrown down due to bad shares. Why? Those who hold bad shares on margin will be forced to sell good shares to cover margin calls.

See, in very bad times even the most precious things like gold is also taken to the pawn shop. How much more good shares? All will be liquidated! Cash and cash alone will be king.

King?

Meet the King of Kings today by going to www.chick.com

Posted by RonnieKimLondon > 2015-08-16 11:11 | Report Abuse

Mr. Chong. God bless you and your family.

Your sound advice and wisdom are our guiding light.

Posted by kcchongnz > 2015-08-16 13:33 | Report Abuse

Posted by inwest88 > Aug 16, 2015 10:35 AM | Report Abuse
kc, great article. Those using your investment strategies are hardly hit by the current fall in prices.

Thanks for your kind words. But I think in a market which is full of fear, every stock got hit, and hit hard. It is a matter of how hard. Stocks which have little fundamentals, and have gone up in prices way above their fundamentals will be hit the hardest, now or soon if prices continued to drop and margin calls start. Those stocks which have good fundamentals and bought at cheap price will be hit in lesser force, and eventually they will recover.

I would say the best thing I have been doing is providing my views on the evils of margin financing. This is the time reality steps in.

Posted by Mat Cendana > 2015-08-16 16:03 | Report Abuse

This is one of the best posts that I've read here. Including this observation: "But we are living in a world of political and economic diversity, and I cannot recall which year we don’t have a lot of problems which would impact the stock markets."

If we look back, even during those good times of a couple of years back, when the O&G and telco counters were minting money for traders, the conditions were not perfect either. There were also local political problems, plus external factors. Admittedly, the factors that we're facing now look more serious. But it's worth holding on to the main point from the quote above.

There are risks (always will be so), but I see the present turmoil and uncertainties as an opportunity. I had sold off way too early a couple of years ago and had left a lot of money on the table. But at the same time, I wasn't around when the O&G sharp decline started, as with the general fall arising from foreign investors selling. Some quality counters are now at attractive dividend yields - consolation for the investor while he waits for the price to recover.

To have a chance to make profits, one has to be in the game. If one is always fearful about prices falling, it's best that he just stays away from the stock market. Buy the Amanah Saham type of investment. But for those with much higher targets, he'll have to risk it with the stock market.

However, I'm approaching this cautiously - using just one-third of my intended capital for each of the selected counters. Whatever happens, I'd still have two-thirds of the cash left. The potential profits will be less, of course, but that's fine. Having cash in hand means having more options. For one thing, I can always opt to average up when the counters show signs of an uptrend (using another one-third of the capital).

Technical Analysis charts may not always produce the right results but at least there's some form of objective data to help with making decisions. Coupled with fundamental analysis, where only promising companies are shortlisted, I believe we have more than a fighting chance to make profits. Regardless of what the market looks like right now.

Do research, decide on what and when to buy, and then just wait. There's no need to start up the online trading app and follow the second-by-second blows. That's for short-term traders and speculators. Would stress us out unnecessarily. Checking the portfolio at noon and the close is more than enough. When it comes to quality counters, they tend to return to mean. It's just a question of how soon or how long. We have seen this before, again and again.

Posted by sarariman > 2015-08-16 16:23 | Report Abuse

well said! thank you for this article :)

Posted by wynlim > 2015-08-17 00:10 | Report Abuse

kc, pls tell your students the only place on earth without any problem is cemetery. They are all dead.

Posted by paperplane3 > 2015-08-17 13:38 | Report Abuse

ha, ks55. wise word.

but remember this, when ppl in fear, Im feeling greedy!

Time to look at property stocks now. some are good fundamental

Posted by inwest88 > 2015-08-17 15:44 | Report Abuse

kc, totally agree with "this is the time reality steps in". Hope to meet up with you again.

Posted by kcchongnz > Aug 16, 2015 01:33 PM | Report Abuse

Posted by inwest88 > Aug 16, 2015 10:35 AM | Report Abuse
kc, great article. Those using your investment strategies are hardly hit by the current fall in prices.

Thanks for your kind words. But I think in a market which is full of fear, every stock got hit, and hit hard. It is a matter of how hard. Stocks which have little fundamentals, and have gone up in prices way above their fundamentals will be hit the hardest, now or soon if prices continued to drop and margin calls start. Those stocks which have good fundamentals and bought at cheap price will be hit in lesser force, and eventually they will recover.

I would say the best thing I have been doing is providing my views on the evils of margin financing. This is the time reality steps in.

Posted by Mat Cendana > 2015-08-17 16:38 | Report Abuse

@ks55 Thank you for your very kind words. I just try to share previous experiences of what worked and what didn't - especially the latter, because there are lessons whenever we make a loss. Or, failed to maximise an uptrend. The latter seems to be one of my weaknesses when trading/investing. After all the hard work of researching, then waiting for the counters to pick up, I'd often sell way too early. Would later shake my head looking at the profits I had left on the table.

We can learn a lot and thereby improve our investing in the stock market. There are ALWAYS opportunities, including and especially when the market is in turmoil. The problem is in spotting what are genuine bargains and what are potential traps. I just hope my strategy will pay off within the next 12 months.

Posted by Mat Cendana > 2015-08-17 19:35 | Report Abuse

@paperplane3 - I'm looking at several property counters too. Like you, I see some very attractive counters at reasonable prices (can't say "cheap", because we only really know what the bottom is in retrospect).

Of course, when the market is like this, even the good companies will get whacked. I'm looking at those which are with attractive dividend yields AND have a record of paying out. Or tend to give bonus as reward. If we have to wait for the price to recover, at least we will have the consolation of receiving some dividend occasionally.

Posted by enigmatic ¯\_(ツ)_/¯ > 2020-03-01 01:28 | Report Abuse

I think in turbulent times like this, this article is worth revisiting.

Posted by jackfruit > 2020-03-01 09:17 | Report Abuse

If you really want to stay invested at this point of time glove industries are the best choice. Covid-19 create huge demand of gloves and political uncertain will depreciate the ringgit.

Posted by qqq33333333 > 2020-03-01 10:23 | Report Abuse

get the major turning points wrong...........I don't care what stocks u have........FD will still give better returns...........hahahaha




and huge losses from sticking to stocks when u should not be in stocks.........





a few good years, all the value investors surface and offering themselves as sifus ...............but alas, the past is over, the future not here...........only the present is real...............

Posted by qqq33333333 > 2020-03-01 18:18 | Report Abuse

kc chong....some questions for u.......

Malaysia is part of USA meh?
Malaysia same strengths in rule of law as USA meh?
Malaysia same political stability meh?
Malaysia same predictability meh?


copy here, copy there American ideas about stock market..................got use meh?

Posted by EngineeringProfit > 2020-03-01 18:31 | Report Abuse

Use the no.36th strategem - RUNNNN

Posted by enigmatic ¯\_(ツ)_/¯ > 2020-03-09 22:19 | Report Abuse

READ THIS ARTICLE

Posted by qqq33333333 > 2020-03-09 22:28 | Report Abuse

u know what, kc.... u will do all your students a favor if u don't lead your students to the stock market.

Posted by ahbah > 2020-03-09 22:28 | Report Abuse

"Even Berkshire Hathaway can go down in price by 50% in a crisis."

Can our Bursa go down by 50% in the current crisis ?

Posted by qqq33333333 > 2020-03-09 22:30 | Report Abuse

when people are not ready they are not ready. period.

Posted by qqq33333333 > 2020-03-10 00:22 | Report Abuse

Posted by ahbah > Mar 9, 2020 10:28 PM | Report Abuse

"Even Berkshire Hathaway can go down in price by 50% in a crisis."
===========

with this statement....no one has ever need to say they are wrong............................................